 Taxing Butter while Buying GunsJeroen Klomp Defence and Peace Economics, 2022, vol. 33, issue 2, 177-200 Abstract: This study examines whether governments use the revenues accruing from agricultural taxes to finance their arms imports. This policy issue is especially of importance for developing countries as the decision to finance the acquisition of arms using agricultural taxes will create a trade-off between two important policy objectives in these countries: on the one hand, ensuring food security for the population at large and, on the other hand, improving national security. Our empirical findings generally suggest that governments in developing countries partly finance their arms imports by increasing the agricultural tax rate. It turns out that the magnitude of this effect relies to a certain extent on country-specific factors such as whether a country has to deal with a security threat, strength of the democratic institutions in place, and the regular occurrence of major shocks to the domestic food provision. Also, taxes on cash crops intended for export are more likely to be used for financing the arms imports compared to taxes on import-competing or subsistence crops. Date: 2022 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:defpea:v:33:y:2022:i:2:p:177-200 Ordering information: This journal article can be ordered from DOI: 10.1080/10242694.2020.1844401 Access Statistics for this article Defence and Peace Economics is currently edited by Professor Keith Hartley More articles in Defence and Peace Economics from Taylor & Francis Journals |
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